Peso weakens as market awaits US-China deal

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THE PESO depreciated on Monday as the market waits for the developments in the trade negotiations between the United States and China.

The local unit closed at P50.83 against the greenback, weakening by 1.5 centavos from its Friday finish of P50.815 per dollar, according to data from the Bankers Association of the Philippines.

The peso opened the session at P50.77 versus the dollar. Its weakest showing was seen at P50.915, while its intraday best against the dollar was at P50.755.

Dollars traded dropped to $757 million from $835.75 million on Friday.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort attributed the peso’s movement for the day to new leads regarding the trade deal between the world’s two biggest economies.

“The peso exchange rate was slightly weaker…after the stronger US dollar versus major global and Asian currencies…after the latest signals by the US and China that the phase one trade deal could be signed as early as January 2020,” he said in a text message.

On Saturday, US President Donald J. Trump said that Washington and Beijing would “very shortly” sign the phase one of their trade pact, Reuters reported.

“We just achieved a breakthrough on the trade deal and we will be signing it very shortly,” Mr. Trump said at a Turning Point USA event in Florida as quoted by Reuters.

The said deal will have the US to slash some of its tariffs on Chinese goods. For its part, China will buy more American farm products.

Meanwhile, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said profit taking before the Christmas break may have dominated the market.

“Positioning for the last trading days of 2019 (the decade) may have also been the key,” he said in a text message. — LWTN with Reuters